Old Dominion Brewery Sale Appears Imminent

Taps at the Old Dominion bar in Ashburn. The company has brewed beer since 1990.
Taps at the Old Dominion bar in Ashburn. The company has brewed beer since 1990. (By Tracy A. Woodward -- The Washington Post)
By Thomas Heath
Washington Post Staff Writer
Monday, January 8, 2007

Old Dominion Brewing, whose pub is a favorite of the high-tech crowd near Dulles International Airport and whose microbrews are sold throughout the Mid-Atlantic region, is close to being sold -- and the buyers may be connected to the most macro brewery of all.

Old Dominion President Jerry Bailey said the sale could happen any day. He declined to identify the buyers, but people close to the microbrewery said the sale would involve Ram's Head Tavern, a Baltimore-based brewery chain, and beer giant Anheuser-Busch.

Regulars are already getting nervous. "The concern is growing over whether they will continue to sell those same beers," said Jack Chungo, 54, a salesman who is a frequent customer. "The majority of people I know have a particular favorite."

Kyle Muehlhauser, a principal at Ram's Head Tavern, did not return phone calls and messages left for him. A spokesman for Anheuser-Busch said the company had no comment.

Bailey said he thought it was unlikely the new owners would change the beers.

"I can't imagine anybody buying a place like this and not keeping the only thing we got," Bailey said. "The brand is the most valuable thing we own."

"We have signed a letter of intent with someone, but we are not confirming or denying any of the other stuff," said Bailey, adding that he was selling the company in order to liquidate his equity.

Customers who had heard the rumors last week said that they are worried that new ownership would bring in new brands of beer, replacing Old Dominion's house brands, including Dominion Ale, Dominion Lager, Tuppers' Hop Pocket Pils, Old Dubliner and Aviator brews, as well as special beers for each season of the year. Nearly 20 brands, all of which are brewed on site, are sold on tap at the pub. The brewery is in an office park in Ashburn, near the Washington and Old Dominion Trail, and is a favorite stop for runners and bike riders.

Old Dominion also brews special recipes for local restaurants including the Dubliner, J. Paul's and the Hard Times Cafe. Murphy's Grand Irish Pub in Alexandria sells Old Dominion beer under house brands Murphy's Ale and Murphy's Blonde.

Bailey owns 22 percent of the company, which includes the pub as well as the brewery operation. The next biggest partner owns 10 percent, and there are 82 investors, he said.

Bailey, 67, a former employee of the Agency for International Development, founded Old Dominion in 1989. The company started brewing in 1990 and in 2006 sold the equivalent of 27,000 barrels of beer and 6,000 barrels of soft drink, making Old Dominion the 50th-largest brewery in the country, Bailey said. Each barrel is equal to 13.78 cases of 24 bottles each. About half of Old Dominion's beer is sold on tap and the other half in bottles.

"We have done quite well," Bailey said. He estimated that the company is worth $4 million to $6 million, but declined to name the sale price. He said one consultant had estimated the Old Dominion brand alone to be worth $2 million.

A former employee of Old Dominion is scheduled to go on trial this spring on charges of embezzling more than $100,000 from the firm. Bailey said the sale was not related to the incident.

Old Dominion announced last March that it was being sold to one of its managers, but the sale did not go through. Sources familiar with the current deal spoke on the condition of anonymity because the sale has not been completed.

© 2007 The Washington Post Company